Why China's economic boom continued dialogue

 Dialogue: Why China's sustained economic prosperity?
Serialized in dark clouds can be sustained? Not long ago, Beijing, Shanghai, Guangzhou, six middle-aged economist at China Economic Research Center at Fudan University, conducted a dialogue to discuss Why continue?
time: 2008 10 月 10 日 18:30 m20: 30
Fudan University, China Economic Research Centre
Lu Ming: Hi everyone, there may be some friends from the media, first of all very Thank you for taking the time this evening to participate in our activities. Today, we organized a forum, this forum titled Some short-term economic impact, but because of a time when we commemorate the thirtieth anniversary of reform and opening up the opportunity to host this event, so the discussion this evening may also involve long-term problems. all of you gentlemen, how much of their research and the Chinese ........ continued development of relations in which we invited four teachers, do today's speakers. First, make a presentation before the event begins. The first one is the China Center for Economic Research Professor Jun Zhang Zhang introduced the teacher to do, but I do not mind we welcome applause. The second speaker was Professor He Fan, who in addition to doing research, social activities are also very rich, but also the Speakers are Professor Yang Qijing bit from the Renmin University of China, he organized a company in the Congress Center and the organization, he is now Executive Director, so I hope the young generation economists, Yang could have in this regard A new career progress. fourth is an associate professor Xu Xiang now, he is a teacher Lingnan College. this evening's discussion is a very relaxing activity, so I think confused a little fun, basically to take in such a way, around Today's theme I mentioned some problems after the end of each issue raised, please four guests, based on their understanding of this issue, speaking three to five minutes, that probably thirty-four. this session, we control in about an hour, Of course, you have to prepare, I would have strong smell of gunpowder that quarreled it does not matter. The next half an hour we can freely discuss the issues of today some of the views published.
we begin today's activities. I earlier simple question about the background of today, in the long run, we discussed the Chinese economy, after three decades of economic reform and restructuring after reached a very critical period. China is a cycle about three decades, I wrote an article article, which is the period mentioned in fact, the meaning of reincarnation. now are beginning to enter the domestic and international economic recession, then to China, the arrival of this period, in the end because the reasons for China's domestic or international reasons more important, is not the advent of this cycle means the end of the rapid growth of China, or the next there will still be sustained and rapid development, these are issues of concern. In the short term, we all know that the onset of the recent U.S. financial turmoil, the serious consequences Needless to say of me. Today around the theme of the event, I would like to mention the first small problem is that some guests would like to ask today, next to China, If we are to maintain sustainable development, and is continuing the development of high-speed In fact, for us, 3%, 5% is not surprising, then rapid growth, the most important factor is what? If the combination of economics, what we should be concerned about the issue, and the issues for China's contemporary economic development is the most important? I first mentioned this problem, then simply follow this order, and then the second question we again reverse.
Jun Zhang: Lu Ming problems just mentioned, we have an international meeting this morning, We also discuss the issue privately. My personal opinion is that China is now able to escape the risks of global financial turmoil. and we have no better way, short-term, and I think we have to pessimistic. We are exposed to many commercial banks out of the question, such as his purchase of U.S. bonds have unpaid debts in that place is dark, the so-called losses, are still not completely counted. from the amount of speaking, our main commercial banks, now have the debt according to different estimates, about three to five billion, including the peace recently exposed this problem. I think we are very concerned about the financial problems caused by their own, but most is not the financial issues, but the U.S. economy out of the question. U.S. economy appears issues and the global economic downturn, gave the Chinese have had a great impact. An American counterparts, said the biggest problem the U.S. has moved from Wall Street to come out, like a cancer, it has permeated all aspects of the economy, including universities, now University of pensions even have a problem. They estimate that the entire fund of Harvard University will drop 60%. My son told me that email, the principal mail to all students that the day may be difficult next year, too, do not expect a scholarship. this situation, the impact of the entire United States has more than just Wall Street. Now, as General Motors also afford to lose a mess. Americans are not consumed, the situation in China is a very big impact. I just said What is the background mean it, that China is now no way to discuss we will not be affected, and in fact we have been and are being affected. As to the extent of impact, we need to further estimate. For China, a very positive thing is the introduction of decision-making and decision-making is very difficult to change. This I think is because the Chinese economy after the government intervention in the 90s too, have to be changed many policies have been very easy, too many interests involved, the itself is very negative. Of course people are concerned about how long this time, I think this background the following in the current, short-term and long-term has been somewhat blurred, such as the United States is now the situation will continue for three years or five years, China economy, turn around time may be when, I think it is anyone's guess. My personal view is that China is concerned, there is no better way, second-best option is to not let the situation deteriorate, so there joint action between the world. But I think now this action may be of some help on Wall Street, but in terms of the entire U.S. economy, in fact, not too great. So now just say, we can find a way to stop this the further spread of things, let things get worse, this is the best option. Therefore, China and the United States at present only with which we now need to reach consensus on one thing. The second thing, and now Everybody is talking about, we need to stimulate domestic demand, or the medium and long terms, in response to the global financial turmoil, but things are not so simple. I believe all of you are aware, yesterday opened the Third Plenary Session of these policies In the out slowly, for the stimulation of consumer demand in China, not so fast, the need for a slow adjustment process, so I personally feel that we are here today to discuss this issue, is there a better way, I think if there were no , we may all join together only through such global economic issues.
Lu Ming: I understand that Zhang's remarks, mainly from the short-term perspective. He Fan, the next teacher to listen to the views of Because some time ago you talked about internal and external imbalances book, Mr. Ho, you is not from the perspective of the entire economic world situation and the situation in China combined.
He Fan: Lu Ming who knows me also. you mentioned to this problem, in fact, should be placed on the thirtieth anniversary next year, talking about something more interesting. In fact, our first three years in revolution; three years later and found more interesting to make money, so the economic development; so the next three decades, China's economy can can not be sustained prosperity, and all the problems of economics, all the problems of economics is only one answer, that depends on what our policy. We are at a crossroads, we have two roads, and we what to do. a way that we also follow the development strategy in the past. We are now seeing a lot of the media, academics, including many officials say, is to quickly rescue the market, the export business, how many have been closed down, the real estate business now claim to be policy. is very simple, you now have investment opportunities in the export sector? No. you can find other entities of the sector investment opportunities? no. that the final will go where the money is definitely to the real estate, stock market, so Finally, not only failed to rescue the Chinese economy, we may put the Chinese economy into a big bubble. but there may be the other way, the subprime crisis is now forcing us to reform, we have no other way to feel, when there is no way, when set of resurrection, it wants to reform. We are now the problems China faces is the internal and external imbalances, we have a mighty force in single, we are engaged in manufacturing exports, this time to save him, the best way is to let He escaped, spared the sooner the better, the farther the better. we must allow more resources to be able to walk away from the manufacturing export sector. Many manufacturing companies have done well, but do not have confidence in the domestic market over the past as do the domestic market, have their own brand, have their own marketing team, and if you do exit, take a order on the line. Wal-Mart give you a list you're happy, but you actually working for others. Now we are forcing Chinese manufacturers to really be competitive, have their own brand, have their own R & D, so that such enterprises to develop. and more importantly, we want to open a door to many live in the enterprise, to transfer to the local development potential, is China's services sector. China's most lucrative services, we are now less than investment, education is a huge gold mine, health is a huge gold mining, transport and communications transportation finance and insurance, all the pillars of the service sector, including the production of services such as logistics and distribution, all of which are huge gold mine. But the problem is we do not open the door. If you do not open the door, all exporters will beaten to death before the arrival of the tsunami did not really, we will he beaten to death on the beach, and if the door quickly, you can put them to stay alive. So how about the future of China's economy in the end, now is a time to make a choice .
Lu Ming: Is it can be understood, if the government macro-management by way of lower interest rates, increasing supply would be a bit dangerous, you mean, but next year may produce bubbles in asset markets?
He Fan : Monetary policy can not change the economic structure, changing the economic structure through industrial policies, so that there is no change in the economic structure of the case, I rush to relax fiscal policy, the first possible resurgence of inflation, and second, to increase liquidity after the the mobile where to go, it is certainly going to the stock market, real estate market.
Lu Ming: the static agree with that?
Yang Qijing: My personal view, my personal definition of China as a future that is prudent optimism. perceptions of China, to stand to see a larger view. on China's economic development, China's problem is development and transition to the two questions into one, while in the existing special an issue under the international framework. We first look at the first question, the issue for China and the United States is now the understanding, I think the short term, This impact is inevitable, which I think everyone is undeniable. but how much impact This may be in theory or from empirical to be examined. The evidence can only be said after, but for now, I think the impact of the financial impact of the reason for the United States so much, because the U.S. industrial structure of its financial structure of very large, so impact of the financial sector received after it has great influence throughout the economy. including, as the UK, the financial crisis led to the UK after the ten international ranking fell. But like China, the problem for China the impact, I think we must take the transmission mechanism to figure out, which is financially out of the question, through this mechanism will not be passed up the real economy. to China, we see a problem with these financial institutions, he is a problem, but one thing, he will not affect the confidence. if confidence in financial institutions under attack, and then the impact to the industry, if the chain exists, then the sub-prime crisis will have a significant impact on us; If the chain does not exist, then this impact, I think it is limited. In addition, from our export structure, I think we will be affected, but how much of this impact, the same should be thinking, because we are the United States and developed countries exports, mainly of its necessities, luxury goods is relatively small. Of course I am not a study of international trade, but to my intuition, it certainly will have an impact, but these people, after all, wear clothes, to eat, still need China. So, I think it is the beginning of the financial impact the impact on the domestic industry worth exploring. the short term, I think the impact will not be particularly special. In addition, the real estate bubble we all thought, to my understanding, to not a bubble, is the result of a post. I have heard some people say, the best real estate prices down 50%, I can only say that you probably good intentions. We look at the U.S. situation, we really do a place to live, after 50% reduction in what the consequences of short-term impact on the financial sector is very large, then the impact of the industrial chain is great. Another is a U.S. subprime mortgage crisis had to think about. I not specifically thought about this, but today I think on the plane in China, the United States, I personally feel that it is in the existing international framework, China's development model and development model of the United States, the United States appears in a certain period people received benefits, but it is precisely this development model in China weakened the competitiveness of the United States. You are a necessity, and you to import, you buy me something cheap Chinese production, industry, escalation, continued erosion of its industries, while China to earn foreign exchange, the United States money, cheap to lend him the Chinese people, led to his decline in interest rates, real estate and further bubble, this one is the output of China's low-cost resources. I sometimes think, sometimes, justified, you think it is cheap resources, even if you do not want to provide, there will be many people willing to offer. In this process, China is there are two problems, one is the development, one is transformation. As the cost of development, from the world that we do not see any country in the development process, the conditions of absolute equality is maintained, a development of poor countries, this is impossible. is precisely what the U.S. market through the use of its demand driven our growth. From this point of view of international economics, no problem, we free trade, but from a dynamic perspective, the ability to enhance China, U.S. manufacturing capacity has declined. so that the sub-prime crisis broke out, I understand now China, India, countries such as erosion of the strength of the United States, although it is under attack, but I personally feel that we have a greater chance.
He Fan: I just talked about the quiet, he spoke through trade channels, the impact of the subprime mortgage crisis on China is relatively large. He only saw the CCB Financial to buy a number of financial products, the loss is not great, but do not forget, we have hundreds of millions of dollars in foreign exchange reserves of 1.8. For example, a person bought this year Some stock is stuck, and very painful, heart-you think the Government has stuck with 1.8 trillion U.S. dollars by the depth of .2003 4 billion U.S. dollars in foreign reserves, we continue to use such a development model, and now has increased more than the original 1.4 trillion, if continued, will be 2 trillion and 5 trillion. On the face of very good, made a lot of money but we are now shrinking, which is happy to see the United States. I Earlier this month, in the Tianjin to participate in the did not diminish the power of the United States, but the United States in a quagmire dragged us to go inside, so the The.
Zhang: I would respond, just listen to it all, Professor Yang mean, in fact, the U.S. subprime mortgage crisis on China's influence is limited, but I think this effect can not be underestimated. Let us think about the world today In fact, on the impact of wealth for developing countries, especially the development of emerging market economies have a very big impact. This morning my American friends in private and discuss this topic, the question now is what we will return to year, and now The problem is that the wealth status of the world fell in the affirmative, shrinkage is yes, what year, but will return back to the 80s, or 2000. In fact, I think no one can now under this conclusion, and now how this kind of wealth in the end, I just talked about the University are facing this problem, so I think now is the time when the global wealth. just like Professor Ho said, because the world five years ago, there have been signs of such the world since the rise of China, her share of global GDP from less than 5%, only about 3% to now nearly 20% less than that, in accordance with the purchasing power of nearly a quarter, so if you want to a scale below the global wealth, China of course will be a very big impact. Second, we think about the world economic downturn, China's economy is based on this wave as a leader, and this wave is the so-called emerging economies market countries, there are about forty economies, their impact is very large, you see changes in global energy prices, inflation is not the first to push the United States, but China is the emerging market countries, they are most vulnerable to energy price impact of our pay for. more than ten years ago, when the rise of China changed the world situation, there are some world production is not only the consumption of the country, to support those who are not only the production of national consumption. China is now the capital of the world output about 15%, we become the largest exporter of capital.
is Xu Xiang: I know nothing about finance and real estate issues, so the first form a state, it was not aware that the topic just now, he was just read some news, not comment. I would like to respond to one point in the end is now the country's economic growth or how. In such an environment now, who is most affected by, is certainly done the most to do foreign trade business . We wanted to do something now, have not really carried out, but you can be and to share it. One is from the enterprise perspective, is not a large number of companies died. in Guangdong, a group of companies is indeed dead, but use the words of government officials, this group is the so-called volume of 2%. these companies gone it, go to the example in Dongguan, Shenzhen, Foshan, Zhongshan, almost is if we go inside, Guangdong Province, which is 70% to 80% within the province, there are some transferred to the Jiangxi, there are still some abroad and it is this corporate shift. Another one is the government doing in this round of what was going on, of course, a large environment, such as the appreciation of the renminbi is not around, but the Guangdong government to do What happened then, one is to improve labor costs, wages increased, these are the Government took the initiative to do. We found that when dealing with local government, when they 03,04 years to do this thing, this time it is When the Pearl River Delta's economic development, land use indicators have been used almost the same, and further development, space is limited. so he had an idea that is death sentence for a number of enterprises, the most effective way is to artificially increase costs, they are still doing One thing is water, electricity, water and electricity companies must use, so by this, he was part of a conscious drive away. He engaged in a number of so-called industrial park. Guangdong to see if the separate case, a relatively developed Pearl River Delta, western or eastern the economy is not how, but also in Guangdong Province where the country's poorest, can be seen in the west, in Guangdong Province will also be able to see, he wanted some companies into just such places, right? they are doing this things, and from 2004 to 2007 we saw the data, in part, the Government do, some enterprises have moved to the park running better, if the local highway can go, then these companies have passed; if No highways, especially in western Guangdong this highway is not in the past, then it is not up development. My personal feeling is that the local government in large changes in the international context has been done before this thing is, they want to develop modern service industry, but also would like to develop this car, and I want to develop the petrochemical this, at least with my personal feeling that he is better grasp on this. you will find the country's investment, we have been concerned about the investment growth rate We maintain a rapid growth rate, but Guangdong's investment is relatively low, Zhongshan or even zero growth rate. I personally feel that we are doing forecasts, depends on pilot indicators, then look at the whole country sustainable prosperity, perhaps we should first look at some of the provinces, Guangdong, perhaps a sample. to do some homework ahead of time, enterprise level, the government level to do some work, these effects will not be particularly large, probably so.
Lu Ming: Thank you for giving us some information on the Pearl River Delta. just say I think its pretty quiet interesting one is the empirical research to be done later. I now have a worry, we are now experiencing the recession crisis, We all know that the main source is the virtual economy and the financial sector, but it will slowly spread to the real sector, I have some concerns a few years we will look back, but also understood as a real cyclical? another point, just the static stresses, that is, the Chinese economy and the world economy links. You see this a recession, said bluntly, China is a certain responsibility. basic logic is actually taking a low-cost approach to development, very low labor costs, we rely on exports, while domestic consumption is not, it causes a lot of foreign exchange reserves, he decided to buy U.S. Treasury bonds, and result in low U.S. interest rates, high borrowing, high prices, and finally barely. The crisis has a very important characteristic is the appearance of global economic imbalances. Just now Professor Ho said that if this issue is not see to take some measures such as increasing the money issue, not only will not solve the problem, but will intensify. Next we involve more medium to long term problems. Now that we can reach a preliminary consensus on structural adjustment is very important, so we should let everyone look at structural adjustment, structural adjustment, especially China, we think the most important aspect is which? but please do not mention China's domestic demand less than that.
Yang Qijing: First of all thank you for a case, the Government in the process of industrial restructuring, in fact, there is a trade-off the development process, and I in response to Lu Ming's question, simply one on foreign exchange reserve thing. If the country's foreign exchange reserves to get the inside hand, did not use their own, different from the get private hands. on the financial links to the real economy, I always insist, in which economic analysis, must take the process and results engage in the situation, we should find out the micro mechanism, not generalities. countries the money loss, and anyway, the money countries do not use, I admit that this definitely is a national loss, but on the real economy where the impact of this gonna lay it clear that this is one of my response. Another, referred to industrial upgrading, I personally feel that if we are talking about long-term, I think I am an optimist, why? China's development model, as I have just said, from the start by pulling the international market demand of China, China's domestic demand does not start. Of course we criticize a lot, but the positive sense, we have plenty of room, if China is now so problems, and developed countries, domestic demand is saturated, we can not find domestic demand, that China's problem is bigger. If China's development to a level of developed countries, we have no other way, and developed countries, can not find where we demand. But in China, how to explore domestic demand, there is indeed a difficult, but medium and long term, is that we have a chance, indicating that our wisdom is lucky hit Ye Hao, Ye Hao is to defeat others, but the key are we still rich. the money not spent, once the demand up, the industrial structure also to this place. We can promote the growth of domestic industrial upgrading, this is to be discussed. the other one, my personal point of view of economic development , I believe in , the entrepreneur will find the problem. Of course the government should be corresponding measures, rather than jump on what we should upgrade to the industry, industrial upgrading is to be determined by the market.
Lu Ming: I should add a few words, just the things that foreign exchange reserves, most of the money in the hands of the government, there is a reason, but it is still the way to China's development and. the one hand, China's exports and more exports and more is not a problem but, if the same would not have so many imports foreign exchange reserves. Why do not import, because China is no demand, there is no more critical enterprise requirements of foreign advanced technology, as too cheap labor, supply and demand are the two reasons and the Chinese foreign exchange reserves continued to increase is related. just said that China's domestic demand is the lack of an opportunity to be justified. you see in Japan, many people put two years of economic decline and restructuring of the Japanese linked to the three products in Japan 60 years accounted for 50%. does exist That question, to adjust domestic demand, because there was appreciation of the yen, exports are also under attack.
He Fan: comparison of their static appearance, 180 million U.S. dollars can not. This is reflected in the original development model is unhealthy, so model development strategy that is your original question, how to adjust it? not allow enterprises to adjust their own, because companies want to adjust, but even before the government nod. I would like to develop the service industry, I do so to make money, Fudan University, I also engage in one, but I can not ah. I look at the hospital so to make money, make money, Union Hospital, so I put forward a harmony in the hospital next to you? not. ICBC bank so bad, but also to save money, the old lady to pick up a number, and then come back home to finish dinner, so that banks can make money, but I went to put forward a bank can? Or not. You say this is what entrepreneurs themselves, why do not I do what I want, traffic , China's railway per capita also a cigarette so long, I am not repair the railway line, if the government does not nod, how to adjust the business. Therefore, the Government still have to adjust, what to do first is to upgrade the manufacturing industry. I agree with Mr Xu said that the phenomenon, and I often went to Dongguan, you see, is very difficult for SMEs, but the number of competitive enterprises in the secret music, next to the competitors finally gone. where we are now very much like the 70s Japan, yen appreciation, rising oil prices, we recall, when Japan beat the United States, is the late 80s, early 90s. In the most difficult times, forcing the Japanese enterprises to improve their product quality, so he changed into a competitive business world, the Japanese can do, so the Chinese people must also be done. So this is one thing, we must forcing companies to compete in China really do R & D, do the brand, to blaze a way to survive, truly global competitiveness of Chinese enterprises will be occurred after the crisis. and then to open the gate, so that service development, so these companies can do it, making money, if not, you manufacturing industry it up. Why Guangdong developed, but only in the near Guangdong to Hong Kong, local development, and similarly, in the sea, Tamkang also the coast, Shantou is also the sea, and are the first coastal city, why not become developed, This and related infrastructure, railway construction, logistics and distribution have not kept up, including our financial not open, not to develop, SMEs can not be together. If education is not open, not open to health care, human capital will not increase, if We have no way for the future upgrading of the manufacturing industry and service sector provides a very rich talent pool, the bottleneck must be the future. In the past the bottleneck is the hardware, the bottleneck must be the future of human resources.
Zhang: I recently read an article said, a relatively fast economic development in countries, in fact, the worst policy, it must be the excessive use of the so-called good policies in the past, this argument can explain exactly like the current situation in China. Recall Zhu 93,94 served as vice premier, when China faces inflation at that time, he took office, iron fist, with a very strict policy to control inflation. to 97,98 years, when he made 98 Premier This policy, as always, .98 years experience in running the financial crisis, financial crisis, he said a few more interesting things, first he said we have to increase foreign exchange reserves, the second, he said, that is, to our stimulate domestic demand, implement a proactive fiscal policy. anyway, he said several several, several of these later became policy. now more interesting is, if counting from 97,98 years, the decade-China policy has not changed, maximization of foreign exchange reserves have not changed, interest rates have not changed, when he promised that China's RMB exchange rate remained stable, as the devaluation of Southeast Asia, not to devalue the RMB, this turned into policy. You remember ten years ago the policy, just mentioned 1.8 trillion foreign exchange reserves, which in fact contain such information. Ten years ago we used some of the policy, that policy at that time may be a last resort, but that policy has now been totally use, and Zhu Rongji in 2002 has been out since the political arena, but his policy is still there, so far, no real change from the policy point of view, this is a very bad thing. It is one thing just turn the conversation Ming Lu, and said to talk about long-term, medium and long term is the structure. In fact, we all know that developing countries in general are facing a structural problem, because there can not distort this development, we must first structure of a mistake, and then to have a relatively fast growth. But now, we need to determine from a theoretical point of view. just the two have talked about before, ...